Marginal Contribution For Bundled Products and Planogram Analysis

Marginal contribution approach for retailers to decide what to stock with limited space also applies to bundled products as well. One just have to consider the cost, selling price, salvage/mark-downs, demand and demand variation of the bundled products.

One can also consider other "products" that makes up the assortment. One just have to include the same details in the calculation. Cost of renovation to deliver a certain ambience can also be included.

If you have a large retail store with wide assortment. You may want to complement this approach with planogram analysis, as planogram analysis can give you better combinations of product layout to achieve higher margins contribution.

Use Slip-sheets To Load Instead Of Manual Loading

If you are still using manual labour to load goods on trucks, do consider using slip-sheets.

Slip-sheet is relatively cheap compared to labor, especially when you can load pallet-full of goods at one time compared to manual loading.

You can also get your suppliers to load using slip-sheets too. Savings can be shared.

A quick win for productivity.

JIT/Vendor Managed Inventory vs Customer Ordering

Your retail outlet ordering too much and your other retailers order more just to buffer? Then products become expired or obsolete with time?

A clear approach to reduce waste and capitalize on inventory pooling is to do Just-In-Time (JIT) inventory.

A practical approach to do this is to focus on products that have stable demand first. Do a parallel run to compare what the retailer is ordering vs what JIT will propose by safety and cycle stock analysis. Consider inventory cost saved throgh pooling at a central warehouse, ordering cost, production synchronization cost and space saved. How the space freed at retailer can be used for products that can generate more revenue.

Approach to Price Online Sales in Buckets

Problem - What is the basic price per volume that a logistics company with online sales can charge to cover delivery cost?

Approach

Step 1: The logistics company with online sales need to share their 2 or more most common box sizes. There will be a smaller box (let’s call it volume x) and bigger box (volume y)

Step 2: The logistics company with online sales can also tell us the volume (as in all the length, breadth, and height) of their deliveries for online sales every day. We can then find out the volume for each product that is delivered.

Step 3: For each delivery volume every day, sort by volume. Using the sorted data, we can then check how many of this volume fit in smaller boxes (with volume x each), the rest will be by bigger box (volume y). Another bigger box is used for the next product if the volume of the previous product occupies more than half the bigger box previously.

Step 4: We can do it for say a few months to get a statistically significant data and identify trends

Step 5: Show trend data and discuss with the logistics company with online sales projected in shipments to confirm the future number of smaller boxes and larger boxes.

Step 6: Base on either future projected combination of smaller and larger boxes, find the volume.

Step 7: Compare the volume found in step 6 with the lowest volume found in Step 4. Decide on the volume to use to calculate the minimum price per unit volume with the logistics company with online sales

Step 8: Get the cost of each delivery from The logistics company with online sales, factor in projected fuel increases, etc… and divide it by the volume decided in Step 7. Base on this cost per unit volume, the online store can charge in 2 step sizes or more. Presto, we have the minimum to charge using per unit, per small box or large box J

We are essentially putting in more space (volume) with 2 or more common box sizes for the logistics company with online sales to price it more easy in a step rate, and yet still cover cost, or even profit from it by leveraging on online consumers’ purchasing mentally.

A parallel run of this approach is needed to ensure that the number of small and big boxes used are accurate enough.

Note: If more than 2 box sizes, we can approximate the number of each boxes using relative volume of each box

QR CODES FOR ONLINE AND OFFLINE USE

1. We can use the same QR code to contain information without accessing the internet, and access the internet by containing basic information without using internet access in a URL

2. In this way, we can already retrieve the information without accessing the internet. Depending on the size of the QR code, it can store from 300 to 4296 alphanumeric characters.

3. When we use the URL to access the internet, it can point us to google forms. I have created my own google form page with customized text of “stockceck” with the link https://docs.google.com/spreadsheet/viewform?formkey=dHNLY2FUX0FSLVJJbXlNNjcxVXZ2ZGc6MQ&entry_1=stockceck , the corresponding QR code is below

4. In fact, we can create our own QR code for free using google charts. I just created one with text “YouRulesforever: with the link http://chart.apis.google.com/chart?chs=150x150&cht=qr&chl=YouRulesforever&choe=ISO-8859-1

5. Being able to create QR code with a url means we can develop applications using QR codes with some simple programming.

6. This capability can also complement existing GS1 bar code standards.

7. QR code information and application examples can be found at http://www.denso-wave.com/qrcode/qrfeature-e.html

Changing Supplies Delivery and Customer Orders to Relieve Staff of Workload

Met companies that shared that their own internal staff is very stretched from internal improvements and current work. How do they get suppliers to deliver and how customers order such that they relieve their staff of workload?

Some ideas of relieving internal staff from workload is to incentivize change in behaviour by suppliers and customers through savings. The savings from internal staff processes can be passed to suppliers and customers so that your internal staff can do higher value added work. The two main approaches and savings are described below

1. Get suppliers to deliver to me such that I relieve workload from staff

- Pickup/delivery consolidation from various suppliers such that you receive one load that facilitates receiving and put-away

- Bulk order from suppliers, especially those fast moving but small enough

- Get suppliers to bundle products that will help me fill orders more quickly

2. How customers order such that I relieve my staff of workload

-Encourage customers to order in bulk through delivery savings

-Help customers order in bulk by giving them a discount through delivery savings

-Give customers a discount by looking at their ordering pattern and stocking up for them

Seamless Mobile Payment & Fulfillment Capability

1. Develop your own website with PayPal payment option - Add in pictures to photobucket or flickr.com to get url

2. Create your free QR code for free with numerous free QR code websites out there.

3.Pay using credit card or PayPal account

4. Operations will receive an email after order confirmation to pick and complete the fulfillment

5. You can also see the order and keep record of your business in your paypal account